Air freight expectations have taken the Logistics Confidence Index higher in June, but growth has been tempered by results in sea freight, according to the latest update from Transport Intelligence (Ti).
The Air Freight Index registered a month-on-month rise of 3.1 points to 56.9 for June 2017. While this score reflected a year-on-year improvement of 6.5 points, it stood 2.7 points below the June 2015 total.
Air freight index
On the confidence level in the present, the situation index noted a month-on-month improvement of 1.5 points to 55.0. This growth was mainly led by the US-to-Europe lane, which rose by 3.1 points to 51.3. Nonetheless, both the Asia-to-Europe (up 1.6 points to 59.0) and Europe-to-US (up 1.4 points to 51.1) lanes grew enough to offset the Europe-to-Asia lane, which declined 0.3 points to 56.9.
The expectations index on air freight performance in the months ahead has spiked in June, the increases across the board underlined by particularly strong performance on the Europe-to-Asia lane, which rose 7.3 points to 59.8. The US-to-Europe lane saw the second strongest growth, improving by 5.2 points to rise to 52.2. A gain of 3.4 in the Asia-to-Europe lane brought that up to 70.1, while a 2.7 point rise in the Europe-to-US lane resulted in a total of 50.4, ensuring all lanes finished above the 50-point mark for the month.
According to WorldACD’s latest note, growing cross-border e-commerce demand is one reason why air freight growth is on the up. In addition, increasing consumer demand in general (electronics in particular) may be another factor, driven by higher purchasing power, especially in Asian markets.
Looking at IATA’s April statistics, meanwhile, the numbers offer a window into the confidence of the air freight industry. April results from the organization showed yields up by 4.5% year-on-year, while FTKs rose by 10.5%.
Sea freight index
On the other hand, the Sea Freight Index demonstrated a far more mixed picture. For June, the present conditions declined, offsetting a slight improvement in expectations, said the logistics industry research and consultancy service.
Vessel space appears to be in much shorter supply than in previous years, following aggressive capacity reduction strategies from the major carriers. Following the Europe-Asia capacity crunch in April, shippers will inevitably be nervous, though at least port congestion problems in China now appear to have been resolved.
The index recorded an overall score of 54.9, having decreased by 0.6 points against the previous month’s score. The result was 7.3 points greater than the score registered in June 2016, and 0.8 points greater than that recorded in June 2015.
Standing at 51.8, the situation index declined by 1.7 points against the previous month. This result occurred following declines in three of the four individual lanes, with only the Asia-to-Europe lane, at 61.8 points, recording an increase (up 1.6 points).
US-to-Europe remained the weakest performing of the lanes, losing 1.9 points to total 37.8 for June. The Europe-to-Asia lane recorded a monthly total of 53.7, having declined by 2.8 points, while the Europe-to-US fell further, down 4.3 points to 50.4.
The expectations index totaled 58.0 points, having risen by 0.6 against the May result. This outcome was chiefly driven by the Europe-to-Asia lane, which increased 2.2 points to 55.8. In addition, the Europe-to-US lane gained by 0.3 to total 54.1 points, while US-to-Europe increased by 0.1, amounting to 53.8.
Together, these results more than offset the 0.5 point decline on the Asia-to-Europe lane, which nonetheless still recorded the highest figure of the four at 66.8.
Photo: calflier001
